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As far as statistical outliers on charts go, the Bank of Montreal produced a dandy on Tuesday that should get some attention from condo market watchers in Toronto.

According to BMO economist Sal Guatieri, there were 10,368 condominiums completed by builders last month in Toronto – a record high. That’s a “whopping” eight times more than the average for the past decade, with only two other months coming even close to that total, in the spring of 2011 and summer of 2012. And even then, not that close.

The BMO economist chalked last month’s record completions up to “construction delays” that had builders playing “catch up” to finish units that were sold in 2011 – a record year for sales, Guatieri noted.

Comment: Right, so they should have been more spread out, but delays caused them to all end up completing in January. Without delays, 2014 might have had 25,000 completions (instead of 20,804) and January only 6,000. Still a lot, but we do need these things in context.

Rising high

The burst in completed units in Toronto comes as other Canadian cities confront mounting inventories of unsold condominiums. Centres like Winnipeg, Montreal and Moncton are grappling with surpluses, a report from the Globe and Mail said Tuesday.

In Saskatchewan, the number of unsold housing units in Regina and Saskatoon hit a 30-year high, according to the report, citing the Canadian Mortgage and Housing Corp. The majority of them condos.

In Quebec, Montreal had a backlog of nearly 3,000 unsold condos last year.

Comment:Almost double Toronto’s inventory.

Warning call

In November, CMHC’s chief economist warned condo builders in certain big cities they need to sell more existing units before planning new ones. Specifically, Toronto and Montreal were singled out.

“The number of units under construction is elevated in these centres,” the CMHC said. “This could develop into overbuilding if these units are completed but not sold.”

In Toronto where demand remains strong, most of the newly completed units have already been sold, Guatieri said, but the burst in completions has left 1,602 units on the market — a 21-year high.

Comment:Now now, again we need context. Take the almost 21,000 completions last year and 10,000-odd in January. That means only 1,600 of 31,000 did not sell. Of completed condos. Add in another 20-25,000 new condo sales last year and you are talking about 1,600 out of 50-55,000 – less than 3%. The ratio is in line with historical averages, it is just that with more condos being built, the absolute number is rising. Sure, 3% of 10,000 is more than 3% of 1,000, but the ratio does not change. But the 97% that are sold, that is what we need to concentrate on.

“This will slow the increase in new condo prices,” the BMO economist predicted.

Comment:No, it won’t. Those are large units (which are hard to sell), units that have bad views, ones where the original buyer backs out for some reason. There are any number of reasons why those units did not sell. And when you have the overwhelming majority selling, there is no reason for the developers to lower their prices. Even if they give those last 1,600 units way for free, they have made their money and are on to the next project. Why is this even a story? Trying to make bad news out of nothing… as usual.

Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.
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7 Millington Street is an unassuming modern loft near Parliament and Carlton Street listed for $1,399,000. The Millington Lofts, once a livery stable (circa 1885), was later converted into lofts in the late 1980s, and upgraded over time. There are only two units in the building, with the other previously listed for $1,100,000.

Comment:I remember stumbling across this building years ago. No other realtors knew about it at that time… What a neat and unique place.

This two-storey unit is not your traditional industrial-looking brick and beam space. The 2,000 square foot loft is downright sexy with a dark wood kitchen, an interior courtyard, and a cozy fireplace in the living room. There’s a glass staircase and a second floor bridge leading to a master retreat and outdoor patio. And there’s still plenty of natural light with the cut-outs and large skylight.

There are only a handful of lofts in the Cabbagetown neighbourhood, including the Peanut Factory Lofts, a processing plant conversion on Sackville Street and the former home of a certain disgraced CBC host, who has since moved to the Beaches (or his mom’s place).

Comment:Don’t forget the Corktown Lofts on River Street, an old tannery dating from around 1853. Next door is the Queen City Vinegar Lofts, a more recent conversion. The Carhart Lofts, an old jeans and work wear factory at Queen and River (that NEVER comes up for sale and almost no one knows about). How about the Brewery Lofts at Queen and Sumach? Amazing old CBC prop warehouse from the 1950s. Heck, the Sword Lofts on Sword Street are pretty amazing, don’t forget that conversion. There are more than you would think, you just need to ask someone who knows. Berkeley Lofts, The Tannery, I could go on…

Today, Cabbagetown is just a quiet neighbourhood amongst classic cottages with the best manicured front lawns in the city. Worth the asking price? Take a closer look.

A large condo alternative without the maintenance fees. The unit is a freehold loft which means no monthly fees or regulations, and you’re free to maintain the property as you like. The space is still larger than most row houses in the area.

MOVE ON IF

You need long-term parking and more than two bedrooms. The seller has a two year transferable rental on single car parking included in the purchase but beyond that, you’ll need to secure a spot and pay up.

Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.
—————————————————————————————————–

As the spring real estate season quickly approaches, you might be thinking of jumping on the chance to buy a condo, but watch out, there are hidden costs associated with maintenance fees.

Comment: Not really. All the costs are outlined in the condo documents for each building. None of the costs are hidden, none are secret.

Condos.ca recently released a study gathering data from every single condominium sold in the Greater Toronto Area over the past five years.

While the study reiterated the widespread knowledge that condo maintenance fees usually go up with more amenities–including pools and saunas – parking could become a murky spot when purchasing a condo.

Comment:Again, not really. They just separated parking costs from the main fee, to better help compare costs per square foot. Taking lockers and parking out makes it much easier to compare apples to apples.

While many condos now require purchasers to shell out upwards of $50,000 for a parking spot, many condo buildings are also charging anywhere from $43-$148 a month in maintenance for warm and heated lots.

Comment:Of course, the upkeep of the parking garage needs to be paid for, same as the actual building. Cleaning, repairs, door maintenance… you name it. That is not free.

Another condo-fee myth debunked by the study is that older condos don’t necessarily mean you’ll be paying more in fees.

Comment:Except that in most cases it does. Generally, older condos cost more. Not always, but most of the time.

Comment:That is true. The older the condo, the more tends to be included in the fees. Newer ones tend to meter almost everything separately, to encourage owners to conserve energy or water. Older condos even include cable TV a lot of times. And then there are co-ownerships and co-ops that include property taxes as well. Point is, you need to know what is included in the fees, educate yourself!

And while newer condos actually do have smaller fees, you get what you pay for – less square footage.

Comment:Which is what most people forget. The larger the unit, the higher the fees. Balconies have to be paid for as well, they are included in the units square footage. Add in a locker and a parking spot, those also need to be paid for. Add in a pool, concierge, etc. Amenities also cost money.

“With condos becoming smaller and smaller, common elements are actually getting valuable to the average condo dweller,” says Rinomato.

Comment:Not always. Many don’t want to have to pay for them. Most people don’t use the amenities. Trust me, I show a lot of condos, the amenities are usually empty. Some buildings have full and busy gyms, but most don’t. I love going swimming at my father-in-law’s condo, we are always the only people in the pool. But go to Pure Spirit on Mill Street, a summer afternoon and the pool is fuller than a cruise ship!

Rinomato says paying less than 50 cents per square feet for maintenance fee is a good benchmark if you wish to control your maintenance fee costs.

The average paid in the Greater Toronto Area is 59 cents per square foot, according to the study.

Comment:But that is misleading, as it is unit cost only. You have to add in parking and locker costs as well, to be able to get a proper monthly cost. Point is, do your homework, know what you are paying for!

Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.
—————————————————————————————————–

TORONTO REAL ESTATE BLOG

Laurin Jeffrey is a Toronto real estate agent. He would be happy to help you find your new Toronto home - be it house or condo or loft. He would also be more than pleased to help you sell your current Toronto property.